The Autumn Statement: impact on buy-to-let

A number of surprises were thrown up by this year’s Autumn Statement, including measures which strengthened murmurs about George Osborne’s ‘campaign against buy-to-let landlords’. But is the Government seeking only to discourage smaller-scale buy-to-let?

What the Autumn Statement contained for buy-to-let

A further 3% hike in stamp duty on buy-to-let properties and second homes will cost tenants up to £55pcm extra, according to building society Kent Reliance.

A property with a value of £175,000 would therefore be liable for £1,000 in stamp duty until April, when the duty will rise to £6,250.

This comes on top of the tax rate more than doubling as part of the summer budget, which put many landlords in the position of being taxed at a higher rate than profits were accrued, to be levied through the removal of their right to deduct the cost of mortgage interest from rental income.

What scale of buy-to-let will be affected?

However, the latest tax increase is only being applied to landlords with 15 properties or less. This has led to accusations that the Government is applying a policy designed to target small-scale landlords, rather than larger, wealthier property holders who can buy property without a mortgage.

The Government has packaged these measures as part of a plan to bring an influx of affordable starter homes onto the market, in an initiative that will last until the next election and beyond. However, critics have stated that the severity of these measures is likely to prove detrimental, making it even harder for young people to save up a deposit.

If you’re a buy-to-let landlord looking for accounting advice, why not get in touch with our expert team today?